INCOME TAX OFFICER, WARD-9(1), KOLKATA, KOLKATA V. SUR MANGAL HOLDINGS PRIVATE LIMITED, KOLKATA

ITA 1437/KOL/2024

AI Insights

The case revolves around the appeal by the Income Tax Officer, Ward-9(1), Kolkata against Sur Mangal Holdings Private Limited concerning the assessment year 2017-18. The primary issues in the appeal were the deletion of additions made under the heads of bogus loss and unexplained investments by the Ld. CIT(A). The Assessing Officer had initially made these additions based on information from a syndicate involved in providing accommodation entries and manipulating stock prices. However, the Ld. CIT(A) found that the Assessing Officer had not adequately substantiated these claims and had not provided the assessee an opportunity for cross-examination, thus violating principles of natural justice. The Tribunal agreed with the findings of the Ld. CIT(A) and dismissed the revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126019 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Other Referred Cases: Principal Commissioner of Income Tax, (Central-2), Kolkata Vs BST Infratech Limited
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAILEN SAMADDER
• Assessee Lawyers: DEVESH PODDAR
• Keywords: Unexplained cash credit; Unexplained investment; Retraction; Principle of natural justice; Accommodation entries; Competent authority; Opportunity of cross examination; Penny stocks; Bogus
• Section: 147; 68; 22; 69; 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA [Before Shri Rajesh Kumar, AM & Shri Pradip Kumar Choubey, JM] I.T.A. No. 1437/Kol/2024 Assessment Year: 2017-18 ITO, Ward-9(1), Kolkata Vs. Sur Mangal Holdings Private Limited GD-59, Sector-III, Salt lake City, Kolkata-700106. (PAN: AADCS4707J) Appellant Respondent Date of conclusion of Hearing 20.02.2025 Date of Pronouncement 22.04.2025 For the Assessee Shri Devesh Poddar, Advocate For the Revenue Shri Sailen Samadder, Addl. CIT, Sr. DR ORDER Per Shri Rajesh Kumar, AM The appeal filed by the assessee is against the order of Ld. CIT(A), NFAC, Delhi dated 13.05.2024 for AY 2017-18 arising out of assessment order passed u/s. 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) by Assessment Unit, Income Tax Department dated 23.05.2023. 2. The assessee has raised the following grounds of appeal: “1. Whether on the fact and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition made under bogus loss amounting to Rs.75,84,698/-. 2. Whether on the fact and in the circumstances of the case, the Ld. CIT(A) has justified to delete the addition made bogus loss of amounting to Rs.75,84,698/-, where the issue is involving as organized tax evasion including cases of bogus capital gain/loss through penny stocks and cases of accommodation entries as per Clause (h) of Para 3.1 of the CBDT's Circular no. 5/2024 dated 15.03.2024. 3.Whether in the fact and in the circumstances of the case, the Ld. CIT(A) erred in deleting the disallowance of unsecured loan made under unexplained investment u/s 69 of the income-tax Act, 1961 amounting to Rs. 30,00,000/-. 4. Whether on the fact and in the circumstances of the case, the Ld. CIT(A) has justified to delete the disallowance of unsecured loan made under unexplained investment u/s 69 of the income-tax Act, 1961 amounting to Rs. 30,00,000/-, where the issue is involving as organized tax evasion including cases of 2 ITA No. 1437/Kol/2024 Sur Mangal Holdings Pvt. Ltd., AY 2017-18 bogus capital gain/loss through penny stocks and cases of accommodation entries as per Clause (h) of Para 3.1 of the CBDT's Circular no. 5/2024 dated 15.03.2024. 5. Whether on the fact and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition made under the head of unexplained credit u/s 68 of the income-tax Act, 1961 amounting to Rs. 35,40,776/-. 6. Whether on the fact and in the circumstances of the case, the Ld. CIT(A) has justified to delete the addition made under the head of unexplained credit u/s 68 of the income-tax Act, 1961 amounting to Rs. 35,40,776/-, where the issue is involving as organized tax evasion including cases of bogus capital gain/loss through penny stocks and cases of accommodation entries as per Clause (h) of Para 3.1 of the CBDT's Circular no. 5/2024 dated 15.03.2024. 7. Whether on the fact and in the circumstances that the department craves leave to add to and/or alter, amend, modify or rescind the grounds herein above before or hearing of this appeal. 8. Whether the decision of the Ld. CIT(A)(NFAC) Delhi is contrary to the judgement of the Hon'ble Division Bench, High Court at Calcutta in ITAT/67/2024 (IANo.GA/2/2024) in the case of Principal Commissioner of Income Tax, (Central-2), Kolkata Vs BST Infratech Limited.” 3. The issue raised in ground nos. 1 And 2 is against the deletion of addition of Rs.75,84,698/- by Ld. CIT(A) as made by the Assessing Officer in respect of bogus loss. 4. The facts in brief are that the Assessing Officer received information from the Department that during the course of search and survey action on a syndicate of persons led by Shri Naresh Jain on 19.03.2019 by the DDIT, Investigation Unit-7(1) and 7(3), Mumbai,it was revealed that Mr. Naresh Jain and his Associates were involved in providing accommodation entries in the form of long term capital gain/loss in several scrips to various beneficiaries across the country. The Assessing Officer noted that the assessee has traded in the scrip of Alankit Ltd. and claimed loss of Rs.1,00,01,226/- (Rs.78,94,353/- and Rs.21,06,873/-). Besides, the assessee has received accommodation entry during the year amounting to Rs.35,40,766/-. Accordingly, the Assessing Officer recorded a finding that bogus loss of Rs.1,35,41,992/- chargeable to tax has escaped assessment and notice u/s. 148(1) of the Act was issued on 22.04.2021 after obtaining approval of the competent authority. The assessee filed the return of income in response thereto on 25.01.2023. The Assessing Officer noted on the basis of information available that assessee by trading in Alankit Ltd.’s shares made a loss of Rs.78,94,353/- and bogus profit of Rs.21,76,873/- in F.Y 2016-17. The assessee is an NBFC and is engaged in the business of share trading, future and derivatives on recognized stock exchange and also involved in money lending. The assessee 3 ITA No. 1437/Kol/2024 Sur Mangal Holdings Pvt. Ltd., AY 2017-18 submitted before the Assessing Officer that it has made a loss of Rs.75,84,648/- on the transactions in shares of Alankit Ltd and there was no profit made during the year and these transactions were made through three brokers namely, Nirmal Bang Securities Pvt. Ltd., Kotak Securities Pvt. Ltd. and Globe Capital Market Ltd. The Assessing Officer thereafter noted that there were very heavy fluctuation in the said shares and Alankit Ltd. is a Public Limited company with 90.5% shares held by 22 shareholders who were family members or relatives of Shri Alok Kumar Agarwal and finally disallowed the loss incurred by the assessee on account of being bogus and added the same in the income of the assessee. 5. In the appellate proceedings, the Ld. CIT(A) deleted the addition by observing and holding as under: “4.10 From a perusal of the assessment order it can be noted that none of the above facts/averments were neither disputed by AO nor even countered in the assessment order. The appellant had submitted all the documents relating to purchase and sale of shares through registered brokers on the recognized stock exchanges, which shares were duly accounted through the demat account of the appellant, while the payments for purchase as well as the receipt of sale proceeds were all through the bank accounts, statements of which were all stated to have been submitted during the assessment proceedings. While the AO in para 3.1.2 of assessment order stated that the information duly furnished by the assessee was examined in detail, yet without commenting on the veracity of the same, he conveniently ignored the submissions made by the assessee, which is evident from the fact that there is neither any rebuttal of the assessee's submissions nor did the AO found any fault with such submissions. The AO had not taken any efforts to prove his case that the loss claimed by the appellant was bogus. The assessing officer extensively referred to Investigation Report issued by Directorate of Investigation, explaining the modus operandi for rigging the prices of stocks abnormally but stopped short of conducting any inquiries. A mere astronomical increase in the share prices of a company which was not commensurate with the financial parameter of the said company is not a good ground for adverse inference. The modus operandi by itself is not an adequate ground to doubt the transactions. 4.11 The AO seemingly, relied solely on the dissemination note of Alankit Ltd. received from DDIT (Inv.) New Delhi, stating that Shri Alok Kumar Agarwal, the key promoter of the Alankit Group, is involved in providing accommodation entries to various beneficiaries by way of bogus LTCG/STCL. No where in the assessment order was there any whisper as to the information relied upon by the AO was ever shared with the assessee as required under the principles of natural justice. 4.12 It is pertinent to note from the facts that assessee had been a regular investor in stock markets and furnished the details of investments made by it. It was submitted that Alankit Ltd was one of the scrip invested by the assessee, among many other scrips. As pointed out on behalf of the assessee, the transaction of existence of purchase and sale of Alankit Ltd. giving rise to long-term capital loss claimed by assessee appears to be fully corroborated by the documentary evidences. The shares have been credited in the De-mat account and transferred but of De-mat. account at the time of sale. Both purchase and sale transactions are carried out through the stock exchange, payments made/received through banking channel and transfer of shares through stock brokers registered with stock exchange. The prima facie bona fides of existence of transaction executed cannot thus be doubted. It is not the case of the AO that the capital loss arising to Assessee in not in the nature of long- term capital gain. 4 ITA No. 1437/Kol/2024 Sur Mangal Holdings Pvt. Ltd., AY 2017-18 The case of AO is that such transactions is an accommodation entry and thus sham. The abnormal increase in prices of share has led to suspicion on bona fides of transaction and was treated as accommodation entry of sham nature. No enquiries were carried out by the AO either on the broker or with the stock exchange with regard to transactions carried out by the assessee nor even with the promotors of the said company whose shares are in issue. The AO had merely relied on the investigation report without linking the assessee with the various allegations levelled in the said investigation report. 4.13 The AO had not proved with any cogent evidence on record that assessee was involved in claiming long-term capital loss by conniving with the so called entry operators and brokers or promotors who were alleged to have been involved in artificial price rigging of shares. The AO had not brought on record any material to show that the price of the said shares had been rigged, leave alone the evidence to prove that assessee was directly involved in such alleged price manipulation of the shares dealt by him in connivance with the promotors, brokers and entry 4.14 As stated earlier, the entire addition has been made merely by placing reliance on the Investigation Wing report. Now the issue that arises is as to whether the AO merely on the basis of investigation wing report could come to a conclusion that the transactions carried out by the assessee as bogus. The AO is expected to conduct independent verification. of the matter before reaching to the conclusion that the transactions of the assessee are bogus. More importantly, it is bounden duty of the AO to prove that the evidences furnished by the assessee to support the purchase and sale of shares as bogus. Hence, the greater onus is casted on the AO to corroborate the impugned addition by controverting the documentary evidences furnished by the assessee and by bringing on record cogent material to sustain the addition. No evidence has been brought on record to establish any link between the assessee herein with the entry operators/promotor who were alleged to have been involved in price rigging of shares artificially or any other person being involved in any price rigging and also the exit provider. This onus is admittedly not discharged by the AO in the instant case. 4.15. Where demat account and contract note showed details of share transaction and the AO had not proved the said transaction as bogus, the long-term capital gain earned on said transaction could not be treated as bogus. The transactions of purchase/sale of shares were done in online platform of stock exchange through the registered share brokers through whom assessee paid/received the purchase/sale consideration. The broker also receives payments for all his transactions from Stock Exchange. The seller and the buyer cannot know the names of each other as well as their respective brokers, who were involved in the trading transactions in the secondary platform. In such a situation, it cannot be presumed that there could be any transfer of cash between the buyers and sellers to convert the unaccounted money. There is absolutely no evidence brought on record whatsoever to allege that money changed hands between the assessee and the broker or any other person including the alleged exit provider whatsoever to convert unaccounted money for getting benefit of long Term Capital Loss as alleged. 4.16 No corroborative evidence establishing the allegation that the transaction is bogus is discernible in the assessment order except the reliance upon the Report of the Investigation wing. In a catena of judicial decisions it is held that' without corroborating evidence, addition ought not to be made by the AO, merely on the basis of findings in the Investigation report of the wing. 4.17. The assessee had made a specific request for cross examination of one Mr. Alok Kumar Agarwal, of Alankit Limited whose statement is heavily and solely relied upon by the AO. While the principles of natural justice mandate that such an opportunity is given to the assessee before holding any such statement against it, the AO vide para 8 if his assessment order stated as under in violation of the principles of natural justice: 5 ITA No. 1437/Kol/2024 Sur Mangal Holdings Pvt. Ltd., AY 2017-18 8. In response to the show cause notice. the assessee has also asked for cross examination. However, based on the facts and circumstances. cross examination is denied and as per the Allahabad High Court decision, cross verification can be denied on exceptional circumstances. The assessment is carried out as per the statements and information received from the Investigation Wino and hence cross examination was not given. 4.18 In view of the above discussion and upon a perusal of the case laws relied upon by the appellant, it is held that the AO is not right in treating the long term capital loss claimed by the appellant as bogus and so the addition/disallowance of loss amounting to Rs.75,84,698/- is hereby deleted.” 6. After hearing the rival submissions and perusing the material available on record, we find that the assessee has furnished before the Assessing Officer all the evidences qua the sale and purchase of shares of Alankit Ltd. along with demat account and also the fact that these transactions were carried out on the recognized stock exchange. We further note that the money was paid and received through banking channel. The Assessing Officer has not commented on the said evidences furnished and merely relied on the report of the Investigation Wing wherein DDIT, Investigation stated that Mr. Alok Kumar Agarwal key promoter of group was involved in providing accommodation entries in the form of LTCG and STCL. Even the ld. CIT(A) noted in para 4.13 that Assessing Officer has not proved with any cogent evidences that assessee was involved in bogus trading in connivance with these brokers and in para 4.14 the Ld. CIT(A) stated that the Assessing Officer has relied on the report of the Investigation Wing. In para 4.17 the Ld. CIT(A) noted that assessee has made specific request for cross examination of Mr. Alok Kumar Agarwal of Alankit Ltd. whose statement was heavily and solely relied on by the Assessing Officer which was not provided to the assessee and thereby the principles of natural justice have been violated. Considering the facts available on record and the reasons given by appellate authority, we are inclined to uphold the same by dismissing the ground nos. 1 and 2 of the revenue’s appeal. 7. The issue raised in ground nos. 3 and 4 is against the deletion of addition of Rs. 30 lakhs by Ld. CIT(A) as made by the Assessing Officer on account of unsecured loan given which was treated as unexplained investment u/s. 69 of the Act. 8. The facts in brief are that according to information available to the Assessing Officer, the assessee has provided unsecured loan of Rs. 30,00,000/- to Aneri Fincap Ltd. and accordingly a notice was issued on 19.01.2023 asking for certain details which was replied 6 ITA No. 1437/Kol/2024 Sur Mangal Holdings Pvt. Ltd., AY 2017-18 by the assessee by furnishing the details of bank account statement and copy of ledger accounts and the Assessing Officer noted on the basis of said evidences that assessee gave an unsecured loan of Rs.30,00,000/- to Aneri Fincap Ltd. According to the Assessing Officer, the Aneri Fincap Ltd. has not carried on any business activity and the said company existing on papers only and is used to generate bogus sales and purchases. Accordingly, the Assessing Officer treated the said loan as unexplained investment u/s. 69 of the Act and added the same to the total income of the assessee. 9. In the appellate proceeding, the ld. CIT(A) deleted the addition after taking into account the submissions and contentions of the assessee wherein the assessee submitted that provisions of section 69A are applicable only those cases of unexplained investment which are not reflected in the books of account whereas on the other hand, the assessee has provided all the requisite documents in respect of loan advanced to Aneri Fincap Ltd. The Ld. CIT(A) on the basis of that deleted the addition by observing and holding as under: 5.5 The submissions made by the appellant are perused with care along with the assessment order. The undisputed fact is that the assessee advances a loan to Mis Aneri Fincap Limited. The assessee had submitted all the relevant documents to evidence the loan transaction. In fact, the AO in paras 6.1 & 6.2 had mentioned the same and acknowledged it. However, the AO inspite of conceding to the fact that the assessee had produced the bank account statements supporting the amount given to M/s. Aneri Fincap Ltd. as loan, yet the Assessing Officer opined that the amount of loan advanced by the assessee to the borrower is liable to be deemed as unexplained investment u/s 69 of the IT Act in the hands of the lender i.e., the assessee for the sole reason that \"the assessee has failed to explain the purpose of the loan given\" as stated by the AO himself in para 6.2 of the assessment order extracted in para 2.2 above. 5.6 Section 69 of the IT Act reads as under: Unexplained investments. “69. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year.” It can be noted that the section, 69 of the IT Act is applicable to investments which are not recorded in the books of account and the assessee offers no explanation to the source of same. Clearly, the facts of the case as noted in the assessment order show that section 69 of the IT Act has no application in the instant case in as much as the said sum lent by the assessee is in the normal course of business and in duly recorded in the books of account, while the transaction took place through bank and the source is never in question. The AO had not disputed these facts. The only reason that the AO cited for 7 ITA No. 1437/Kol/2024 Sur Mangal Holdings Pvt. Ltd., AY 2017-18 invoking section 69 of the IT Act in this case is that \"the assessee has failed to explain the purpose of the loan and hence the amount of Rs.30,00,000/- given as unsecured loan to M/s. Aneri Fincap Ltd. is treated as unexplained investment\". Such a reason is not under the mandate of the section 69 of the IT Act and so addition so made u/s 69 of the IT Act is unsustainable. 5.7 The AO vide para 3.2.1 of his order stated as follows: \"According to the details available with the department, assessee has provided loan of Rs. 30 Lakhs as unsecured loan to Aneri Fincap Ltd. Therefore, a notice u/s.142(1) was issued to assessee on 19.01.2023 asking for the following details: i. Nature of business/profession carried out during the F. Y.2016-17. ii. Financial statements with scheduled break ups. iii. Details of transactions with Aneri Fincap Ltd. The assessee duly responded to the notice and furnished the details of bank account statements and copy of ledger accounts. The details furnished by the assessee were examined in detail. As per the assessee, assessee had given unsecured loans amounting to Rs.30 Lakhs to Aneri Fincap Ltd.\" This shows that the AO had called for the details regarding the said loan advanced to M/s. Aneri Fincap Ltd. and the assessee had furnished the accounts as well as bank statements whish the AO confirmed to have been examined by him. So the AO is well aware that the said loan is duly recorded in the books of account. Further vide para 6.1 the AO reconfirmed the fact that the said loan' is recovered and that a further loan is again advanced to the said borrower. The AO vide para 6.2 of the assessment order categorically admitted that the assessee had produced the account statements supporting the amount given to M/s. Aneri Fincap Ltd. as loan. However, the AO misguided himself into invoking section 69 of the IT Act for the sole reason that purpose of loan stands unexplained, which action is patently unjustifiable in law. 5.8 Since the said loan advanced by the assessee stands recorded in the books of account which fact is not disputed by the AO, treatment of the said loan given by the appellant as unexplained is wholly devoid of any merit and so addition of the same u/s 69 of the IT Act is unsustainable in law. Accordingly, the addition of Rs 30,00,000/- u/s 69 of the IT Act is hereby deleted. 5.9 Accordingly, Ground-2 of appeal stands allowed.” 10. After hearing the rival contentions and perusing the material available on record including the appellate order, we find that the assessee has duly accounted for the loan in the books of account which was advanced to Aneri Fincop Ltd. and also produced before the Assessing Officer the evidences confirming the said loan since the assessee is an NBFC and is engaged in the business of advancing loan. Therefore, the said loan was advanced in the normal course of the business of the assessee. The Ld. CIT(A) has rightly appreciated the issue that loan given cannot be treated as unexplained u/s. 69A of the Act as the assessee has fully disclosed and accounted for in the books of account. The Ld. CIT(A) in para 5.2 noted 8 ITA No. 1437/Kol/2024 Sur Mangal Holdings Pvt. Ltd., AY 2017-18 that the Assessing Officer after taking cognizance of the documents filed by the assessee and their account as well as the bank account noted that the assessee has advanced loan to Aneri Fincop Ltd. but then wrong on a track by treating the same as unexplained investment.Thus considering the facts on record and the appellate order, we are inclined to uphold the same by dismissing the ground no. 3 and 4 of the revenue’s appeal. 11. Issue raised in ground no. 5 and 6 is against the deletion of addition of Rs.35,40,776/- by Ld. CIT(A) as made by the Assessing Officer on account of unexplained cash credit u/s. 68 of the Act. 12. Facts in brief are that the Assessing Officer received information that assessee has received accommodation entries of Rs.35,40,776/- from Shri Naresh Manickchand Jain and accordingly, notice was issued calling for certain formation which was furnished by the assessee by responding the said notice. The assessee submitted that the assessee is not aware of Shri Naresh Manickchand Jain but at the same time the assessee submitted a retraction letter from Shri Naresh Manickchand Jain which according to the Assessing Officer is contradictory. Thereafter, the Assessing Officer made addition of Rs.35,40,776/- without making any specific finding as to how this money was received and credited in the books of account. 13. In the appellate proceedings, the Ld. CIT(A) deleted the addition after taking into consideration the reply of the assessee by observing and holding as under: 6.5 The AO had mentioned in more than one instance in the assessment order that while scrutinizing the bank account statements, it is also learnt that there are several unexplained credits which were used to provide loans & advances which created suspicion about credits reflected in the bank account statement and hence the amount of Rs.35,40,776/- is to be considered as unexplained credits. As rightly pointed out by the appellant, the AO failed to quantify the so called unexplained credits in the bank account -date-wise amounts. The AO merely mentioned that the bank accounts contained unexplained credits without actually quantifying them and without confronting the assessee with the same. Once the AO had not put-forth the same to the assessee, his conclusion that the credit stands unexplained is wholly baseless. AO is not right in holding the said amount as unexplained primarily without refuting the assessee's affirmation that the said party is not related to it and secondly, the AO irrationally attempted to corelate the so called information regarding alleged accommodation entries, with unspecified/unquantified credits in the bank and reached an ambiguous conclusion that Rs.35,40,776/- is to be treated as unexplained while honestly admitting in the assessment order itself that the said conclusion is based on 'suspicion'. 9 ITA No. 1437/Kol/2024 Sur Mangal Holdings Pvt. Ltd., AY 2017-18 6.6 The addition of Rs.35,40,776/- is made by the AO is u/s 68 of the IT Act. It is well established that an addition u/s 68 of the IT Act can be made once a credit appearing in the books of account of the assessee is not satisfactorily explained i!1 terms of identity of the creditor, creditworthiness of the creditor and genuineness of the credit transaction. In the instant case. the AO failed to identify any relatable credit in the books of account that matches with the information with him regarding accommodation entries leave alone calling for explanation of the assessee in respect of such credit. The AO merely relied upon information received from the Investigation wing and did precious little to corroborate the said information with any further information/inquiry. This is very much evident from the fact admitted by him in the assessment order itself in as much as in para 8 of the assessment order, the AO while justifying his denial of opportunity of cross examination stated that \"The assessment is carried out as per the statements and information received from the Investigation Wing and hence cross examination was not given.\" This shows that the AO had solely and wholly relied upon the information received from the investigation wing while he had neither conducted any independent inquiry to corroborate the findings of investigation wing nor the AO had even provided an opportunity of cross examination to the assessee in gross violation of the principles of natural justice. 6.7 In view of the above, it is clear that the AO had not found any such credit in the books of account that can be treated as unexplained. The AO had not even quantified the so called 'credits' in bank account which according to him are unexplained while the fact remains that the AO had not even called for the explanation of the assessee over such 'credits'. The assessee was neither supplied with any such information in the possession of the AO nor was confronted with any such alleged 'accommodation entries' nor was provided any opportunity of cross examination of the alleged accommodation entry provider. In consonance with the assessment order and the submissions of the appellant and in view of the issue discussed thus far, it is held that the AO does not have any solid ground to make the addition of Rs.35,40,776/- u/s 68 of the IT Act and such addition made based on suspicion is unsustainable. Accordingly, the addition of Rs.35,40,776/- made u/s 68 of the IT Act is hereby deleted. 6.8 Accordingly, Ground-3 of appeal stands allowed.” 14. After hearing the rival contentions, we note that on the basis of evidences filed by the assessee there was no credit appearing in the books of account of the assessee. The Assessing Officer, however, just relied on the information received from the department that assessee is beneficiary of accommodation entries to that extent and we also noted that the Assessing Officer could not point out as to how the assessee has received accommodation entries. The ld. CIT(A) has recorded a very categorical finding in para 6.5 and 6.6 that Assessing Officer could not pin point any of the entries in the books of account. In para 6.7 the ld. CIT(A) specifically noted that the Assessing Officer had not found any credit entries in the books of account that could be treated as unexplained cash credit and so much so the Assessing Officer has not even quantified the so called credits in the bank account which according to him remained unexplained. Finally, the ld. CIT(A) deleted the said addition on the ground of suspicion and surmises. 10 ITA No. 1437/Kol/2024 Sur Mangal Holdings Pvt. Ltd., AY 2017-18 15. We have carefully considered the rival submissions and examined the documents/evidence produced before us and have gone through the appellate order. We find that there is no infirmity in the order passed by the ld. CIT(A). Accordingly, we uphold the order of the Ld. CIT(A) by dismissing the ground nos. 5 and 6 of the revenue’s appeal. 16. Ground nos. 7 and 8 are general in nature and need no adjudication. 17. In the result, appeal of the revenue stands dismissed. Order is pronounced in the open court on 22nd April, 2025 Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) Judicial Member Accountant Member Dated: 22nd April, 2025 JD, Sr. PS Copy of the order forwarded to: 1. Appellant–ITO, Ward-9(1), Kolkata 2. Respondent – Sur Mangal Hlodings Pvt. Ltd. 3. CIT(A), NFAC, Delhi 4. Pr. CIT 5. DR, ITAT, Kolkata, True Copy By Order Assistant Registrar ITAT, Kolkata Bench, Kolkata "